A Study On The Effect Of China’s Environmental Regulations Upon Technical Innovation Of Foreign-invested Industrial Enterprises

Porter hypothesis indicates that in the short term,environmental regulation policy will increase the production costs of enterprises,but in the long term,proper environmental regulation intensity can stimulate business innovation,so as to not only reduce the enterprise cost,but also improve the productivity and competitiveness of enterprises.Due to its practical significance,a large number of scholars have been studied.However,domestic and foreign scholars focus on the enterprise level to study the hypothesis,mainly from the perspective of regional and Industry Research.The research on the relationship between the intensity of environmental regulation and technological innovation of foreign-invested indus-trial enterprises is not deep enough.Therefore,this paper uses the Malmquist productivity index to decompose the total factor productivity,and get the index of technological innovation in foreign capital enterprises.Then it uses the panel data method to test the industrial sector of foreign capital enterprises in 28 provinces of China during 2004-2013.At the same time,the environmental Kuznets curve was introduced to predict the turning point of the environment.Research results show that:The initial weak environmental regulation intensity does weaken the technical progress rate of foreign enterprises.However,with the increase of the intensity of environmental regulation,the rate of technological progress of enterprises gradually increases.That is,the relationship between the intensity of environmental regulation and the technological innovation of foreign capital enterprises is "U" type.Therefore,for the long-term point of view,the government should formulate proper environmental regulation policy,stimulating innovation in foreign enterprises,and finally achieve economic growth.